Improving cash flow for Recruitment Agencies in turbulent times
The current market conditions due to COVID-19 can be particularly harsh for recruiters, especially those specialising in sectors directly hit by suspension of day-to-day operations.
Whilst there may be less new business to be had right now, there are still actions you can take to help cash flow.
Collecting invoices already outstanding
It’s likely there are invoices sitting on your ledger past their due date. Whilst some of these may be with customers who may be struggling in the current environment you should still take action to remind them of their obligation to pay. We have compiled some advice and tools to assist you in collection including general advice. Protecting your business against the virus and letter templates specifically for the recruitment sector. These include final demands and letters to handle disputed cases such as temp to perms or back door hires.
If you do need assistance in collecting then our outsourced credit control service can work under your brand to collect whilst protecting your customer relationships, or for individual customers where a firmer approach is necessary our commission only debt recovery service specialises in getting recruitment debts paid quickly with no up-front fee. If you have any old invoices that you had previously written off as bad debt, even those where you had engaged a solicitor or debt collector, then we are still able to act on them. We regularly achieve payment of debts where other firms have failed (even where there is a County Court Judgment (CCJ) and still no payment).
Finding additional revenue for perm engagements
It’s common for recruiters to focus almost 100% of effort on selling and resourcing, leaving little time for auditing. It’s estimated that more than 1 in every 500 CV submissions results in a back door hire, so the chances are that you will have been responsible for an engagement without being made aware of it. Sterling have worked with recruiters who are adamant that they are so close to their clients that a back door hire could not have taken place, but more often than not we do find cases. Sometimes it is an honest mistake by the client, for example with a different department engaging the candidate, or employing them in a different role at a later date. More often though the client understands a fee is due but is reluctant to pay and so does not inform the agency.
Sterling Debt Recovery provides a service for finding back door hire cases, working on a no-find, no-fee basis so there is no risk for the agency. All we need is data from your CRM/ATS system and a few days to process and check. In the current environment especially, it may be worthwhile investing the time in double checking. As a worst case outcome if we don’t find any cases then you’ll be assured that your processes are working well and your clients have been honest with you. A more likely outcome however will be that we find revenue that you weren’t aware you had earned.
Find more information on HireChecker, back door hire discovery service. And if you’re already aware of back door hire cases but are struggling to get them paid then check our recruitment commission only debt collection service.